Banking sector loans down slightly in September 2016
Gross loan portfolio in Azerbaijan retreated 0.3% m/m (-12.2% y/y) in September 2016, as loans provided by banks with full and some foreign capital declined 1.4% m/m (-24.3% y/y). Loans by state-owned banks were broadly flat compared to the previous month, while locally owned private banks’ loan portfolio increased 0.2% m/m (+0.1% y/y) in September 2016.
At the sectoral level, the main positive contribution to the loan portfolio came from loans to trade and services (+2.1% m/m) and mortgage loans (+3.7% m/m), while contractions in non-mortgage household loans (-3.0% m/m) and in construction and real estate loans (-3.3% m/m) were the key negative contributors.
Loans in local currency were up 1.1% m/m, while FX-denominated loans were down 1.8% m/m in September 2016.
NPL rate remained broadly flat m/m in September 2016
Given limited growth in non-performing loans (+0.3% m/m), the NPL rate remained broadly flat at 9.5% in September 2016. The NPL rate stood at 8.6% for local currency loans and 10.5% for FX loans.
Deposit dollarization down to 78.6% in September 2016
Banking system deposits were down 3.5% m/m in September 2016, driven by a 6.8% m/m contraction in deposits of non-financial corporations (NFC). AZN deposits of NFCs were up 20.0% m/m, while FX deposits were down 16.2% m/m in September 2016. With the currency structure of deposits of households and financial entities remaining broadly flat, dynamics in the deposit structure of NFCs helped the dollarization ratio of deposits in the banking system to retreat from 81.0% in August 2016 to 78.6% in September 2016.
Tax receipts slightly above the budgeted level in 10M16
According to the Ministry of Taxes, tax receipts in 10M16 were at AZN 5.7bn, 100.1% of the budgeted level. In annual terms, tax receipts were down 4.4% in 10M16, on the back of a 26.8% y/y fall in oil taxes. Non-oil taxes were up 6.1% y/y to AZN 4.3bn.
In October 2016, tax receipts were down 10.9% y/y to AZN 0.8bn, as a 7.7% y/y increase in oil taxes was not enough to compensate for a 20.1% y/y fall in non-oil taxes.
